There are several savings schemes offered for investment, provided by each the government as effectively as public sector economic institutions. These savings schemes cater to a wide variety of folks and encourage individuals to invest for several targets in life such as children’s education, marriage, retirement, and so on.
There are also a selection of savings schemes to cater to a wide variety of investors based on their danger profile. Some of the common government savings schemes involve Public Provident Fund (PPF), National Savings Certificate (NSC), Post Office Savings Account, Post Office Time Deposit, Post Office Recurring Deposit, Post Office Monthly Income Scheme (POMIS), Kisan Vikas Patra (KVP).
Most of these government savings schemes are common amongst investors as they are trusted, low danger and safe. Experts say some of these are perfect for lengthy-term wealth creation. As these investment possibilities are not impacted by industry volatility, they are regarded as safer investment possibilities, specifically for the conservative investor. Some of these investment possibilities come with a lock-in period and inflation-beating returns. Along with that, to maintain up with the increasing charges and inflation, the interest prices are revised quarterly or half-yearly on some of these savings schemes.
Public Provident fund (PPF) – Any person can make a minimum investment of Rs 500 per year, and up to a maximum investment of Rs 1.5 lakh per year. The interest price earned by the investor is 7.1 per cent p.a. compounded annually. Investors also get a tax deduction of up to Rs 1.5 lakh.
National Savings Certificate (NSC) – One can make a minimum investment of Rs 1000, with no upper limit. The interest price earned by the investor is 6.8 per cent p.a. compounded annually. A tax deduction can also be claimed on the deposit made up to Rs 1.5 lakh.
Post Office Savings Account – Any resident person can commence with a minimum investment of Rs 500, with no upper limit of investment. The interest price provided is 4 per cent p.a. The interest earned with a post workplace savings account is tax-totally free.
Post Office Time Deposit – An person can make a minimum investment of Rs 1000, with no cap on maximum investment. The interest price provided is 5.5 per cent for the initially 3 years, and 6.7 per cent for a deposit tenure of 5 years. Tax deduction below Section 80C of the Income Tax Act, 1961 provided up to 5 years on deposit.
Post Office Recurring Deposit – One can make a minimum investment of Rs one hundred, with no upper limit. The deposit can be made by an person alone or jointly. The interest price provided is 5.8 per cent. The interest is taxable, with no deduction on deposit.
Post Office Monthly Income Scheme (POMIS) – One can make a minimum investment of Rs 1000 with a maximum of Rs 4.5 lakh in a single account and Rs 9 lakh in a joint account. The interest price provided is 6.6 per cent per annum payable month-to-month. The interest is taxable, and no deduction is permitted on deposits.
Kisan Vikas Patra (KVP) – An person can make a minimum investment of Rs 1000, with no upper limit. The interest price provided is 6.9 per cent p.a. compounded annually. Interest tax, the quantity received on maturity exempted. With this investment alternative, the quantity invested doubles in 10 years and 4 months (124 months).